By Peter Nurse
Investing.com - U.S. stocks are set to drift lower Friday, amid increased trade tensions with China and ahead of likely dismal economic data illustrating the damage done to the high street by coronavirus-driven lockdowns.
At 07:25 AM ET (1110 GMT), S&P 500 Futures traded 19 points, or 0.7%, lower,Nasdaq Futures down 64 points, or 0.7%. The Dow futures contract fell 163 points, also a drop of 0.7%. This looks likely to be the worst week for stocks in two months.
The Trump administration on Friday moved to block shipments of semiconductors to Huawei Technologies from global chipmakers, in an action that could ramp up trade tensions with China, Reuters reported.
Relations between the two largest economies in the world have become fraught of late, with the U.S. government blaming Beijing for the origin and spread of the Covid-19 virus. Trump on Thursday had talked of cutting the U.S.'s entire trading relationship with China.
The key economic release, in a busy end to the week, is April’s retail sales data, which is expected to show a 12% drop from March, the biggest monthly drop on record.
Industrial production and manufacturing output are also due at 9:15 AM, and are expected to have fallen 11.5% and 13%, respectively.
Data from China published earlier showed a bright spot in that industrial production rose in year-on-year terms for the first time since the pandemic erupted, but consumers were still noticeable by their absence as retail sales slumped 7.5% on the year.
In a vivid illustration of the difficulties the retail sector has had during the lockdown, troubled retailer JC Penney (NYSE:JCP) could follow Neiman Marcus in filing for bankruptcy as early as Friday, according to reports.
That said, Denny's (NASDAQ:DENN) shares climbed more than 14% premarket after the restaurant chain reported better than expected earnings despite the difficult conditions.
Investors will also be keeping an eye on news from the Hill, with the House of Representatives Democrats set to present the latest relief bill, to the tune of $3 trillion. President Donald Trump has already indicated that he would be open to more stimulus, but would not support this bill.
Elsewhere, Abbott Laboratories (NYSE:ABT) stock dropped 3% premarket after the U.S. Food and Drug Administration cautioned the public about the reliability of a widely used rapid test for the coronavirus made by the health care company.
Oil futures caught the positive tone Friday, helped by the industrial production data out of China, the world's largest importer of crude.
At 7:25 AM ET, U.S. crude futures traded .2.4% higher at $28.21 a barrel. The international benchmark Brent contract rose 2.1% to $31.77.
Elsewhere, gold futures rose 0.1% to $1,743.35/oz, while EUR/USD traded at 1.0813, up 0.1%.